While the broad-based improvement in prices across the country may be seen by some as a welcome development, to others, the enormous price gains in larger Chinese cities are merely adding to the risk of a severe, and dangerous, correction in China’s property sector in the years ahead.

Gerard Burg, senior Asia economist at the NAB, is one analyst who thinks the recent rebound is not being driven by fundamentals but rather an attempt by authorities to reinflate property prices to spur on other sectors in the economy.

“Policy changes that have relaxed purchase requirements, looser credit and the poor performance of alternative investment options have started to re-inflate the property bubble that had somewhat deflated across 2014 and 2015”, said Burg in recent research note to clients.

“At a fundamental level, little has changed in China’s property markets – with excess supply persisting in many locations.”

Despite years of unsold housing inventory that continues to exist in smaller Chinese cities, the desire to spur on construction and industrial activity through higher house prices is working, at least for the moment.

Property investment increased 9.7% year-on-year in April while the amount of floor space sold over the same period rose to 117 million square metres, up 44% on the levels of a year earlier.

China’s steel industry, plagued by severe overcapacity, is also rebounding, producing more crude steel in March than any month on record according to figures released by the China Iron and Steel Association (CISA).

If you look at China’s industrial, construction or property sectors, all are humming right now.

Whether that’s a good thing is another question, particularly as these are the same industries that drove Chinese economic growth in the past, and the same ones that created the imbalances that policymakers have been grappling with — at least in theory — of late.